sustainable competetive strategy
DESCRIPTION
strategies for sustaining competitive strategies, and how suzlon applied to sustain its competitive advantageTRANSCRIPT
Presented by-: Manas Kumar
Saurav Kumar Saurabh Singh
SUSTAINABLE COMPETITIVE ADVANTAGE
Sustainability is a framework for responding to the emerging competitive threats and maintaining competitive advantage.
Sustaining competitive advantage requires erecting barriers against the competition.
A competitive strategy consists of moves to
1) Attract customers2) Withstand competitive pressures3) Strengthen an organization’s market position
3
CREATE COMPETITIVE ADVANTAGE
Cheaper (lower cost) producer: ?Better (superior perceived quality): ?Newer (more innovative/up to
date/fashionable): ?Faster (speed to market): ? More desirable/ distinctive (successful
branding):?Better reputation: ?First mover advantages: ? Provide your own examples of firms that
compete successfully on this basis.
4
RECOGNISING PATTERNS Advantage comes from understanding and exploiting the
emerging competitive market patterns. There is scope for advantage based on:
Search/ scanning capabilities Analysis/ interpretation capabilities Risk taking capabilities Implementation capabilities Change management capabilities Ownership of/ access to required complementary assets/
capabilities The ability to do this depends in turn on the effectiveness and
integration of the appropriate key business activities and processes (distinctive capabilities/ competencies) which underlie cost competitiveness, quality, innovation, speed to market, network building, and customer intimacy.
Production, marketing, logistics, supply chain management, collaboration, branding, quality, market development, product development, and innovation.
Which in turn depends on organisational processes and practices such as HRM, information and decision management, and relationship management.
Porter’s approach to CA Low cost/ differentiation may indeed be the proximate
cause of CA but they cannot be the ultimate source. Low cost positions, superior quality, speed to market,
or whatever, must come from something or other the organisation has or does.
For example in Ricardo’s time the superior returns (CA) of some farmers indeed came from lower costs which derived ultimately from superior quality (ie more productive) land, a resource that was very hard to make more of!
Nowadays Nokia’s or Dell’s superior returns come ultimately from something similar, something (scarce and hard to make more of) which allows them to do things which enable them to offer a better ‘value for money’ proposition to consumers. But what things exactly?
manecon/options/create 5
Conditions for sustaining a competitive advantageA difference that mattersA gap in capabilities
1. Gap in business system2. Gap in position3. Regulatory and legal gaps4. Gap in R&D and implementation
Sustainable differentiation
SWOT ANALYSIS OF SUZLON(THREATS)Intense competitionOver dependence on USForeign Exchange RiskTechnology RiskDecreasing price of crude oil
SWOT ANALYSIS OF SUZLONSTRENGTH(Company Values)People strengthAggressive Vertical Integration StrategyStrong R&D teamExpanding Manufacturing CapabilitiesStrong Order BookAggressive Growth
SWOT ANALYSIS OF SUZLON(STRENGTH)
Cost ReductionReverse OutsourcingEnd to End SolutionVertical Integration and AmalgamationMarket Leadership in India and Global
PresenceGrowthIntegrated Business model
SWOT ANALYSIS OF SUZLON(WEAKNESS)Management StructureCapital IntensiveOverseas BusinessCash ConversionGrowth in asset overweighting growth in
revenue
SWOT ANALYSIS OF SUZLON(OPPURTUNITIES)Environmental and Governmental InitiativesFavorable tax exemptionsUntapped offshore marketSteady source of demand
SWOT ANALYSIS OF SUZLON(THREATS)Intense competitionOver dependence on USForeign Exchange RiskTechnology RiskDecreasing price of crude oil
Company overview
Company overview
Timeline & Select Milestones
Suzlon group – global presence
Acquisition of Hansen Transmission
Drivers for growthThree key drivers to go beyond India:1. Access to technologyTechnical collaboration with Südwind (1995)
internalizing R&D by 1997/8 Formation of AE Rotors in the Netherland•
Netherlands Product and process engineering in India Alliances: e.g. joint venture with Elin GeneratorsMaiden venture into the US market (2002/3) European technology platformExperienced European wind energy professionals
(engineers, researchers, technicians) as the core to drive Suzlon’s R&D Compete in India
2. Access to people Experienced professionals in e.g. international sales, project management,
service management etc. with existing and tested relationships comprising the
core team Follow the demand – North America, Europe, Australia, China etc. Creation of Business Units (local organisations, local manufacturing etc.) Follow shift in customer trends (consolidating and becoming bigger more
complex higher demands for technology, services, Industrial plans etc.3. Access to new markets/customers Acquisitions: Repower / Hansen Transmissions enter new markets and access new customers build up experienced and international (but localized)
managerial/specialist base local manufacturing to lower transportation costs expand product portfolio access state-of-the-art technology
Edge over competitors
Proactively addressing challenges at their root
Blade cracks Retrofit exercise under way after satisfactory conclusion of
RCA and solutionOrder book slowdown S88 V3, with demonstrable performance, positioned as
mainstay for internationalmarket Strong pipeline of potential customers Cost competitiveness, vertical integration and expanded scope
of services toprovide edge in tough market conditionsGlobal credit crisis Well-diversified market reach hedges geographical
risk Focusing on key markets and customer relationships Current customer profile dominated by utilities and
financially sound developers
Working capital management Working capital buildupWorking capital reduction plan designed in
association with AT Kearney Receivables Program management for order fulfillment Improvement in production planning process Improvement in documentation and certification
process Inventories Procurement reduction Non- and slow-moving inventory reductionRedistribution of excess between units Mismatch and excess inventory reduction
Sustaining competetive advantage